GIF files are saved in a compressed, indexed-color format and are commonly used for Web graphics. They use lossless compression, which means they do not lose any quality when compressed.
The GIF format supports up to 256 colors (including transparent pixels), which may be predefined or selected by the user. GIFs can also be animated, making them popular choices for buttons and other small Web graphics. However, since GIF images can only contain 256 colors, they are not ideal for digital photographs. This is why most digital photos are saved as .JPG files.